IDFC looking at new models for road projects

quot;The annuity model is based on availability of funds in the road fund and the fact that we give both the Oamp;M operation and maintenance and EPC engineering, procurement and construction contract to the same person and the response so far has been encouraging with six international and two domestic bids being received.quot;

Under this model, the government will pay the private concessionaire a fixed annual fee for building, operating and maintaining the road.

In April, the Indian government approved the creation of a fund for the development and maintenance of roads and railways through a new levy on petrol and diesel fuel.

The National Highway Authority of India NHAI proposes to mobilise Rs 2,000 crore 4.49 billion from this fund for road projects, including the widening of highways, which currently have only two lanes in most places, to four or six lanes.

quot;This annuity model is being tried for the first time and if it succeeds, we hope to have a template which can be quickly replicated across other road projects,quot; Munjee said.

He said the other model suggested by IDFC and being attempted by the NHAI on a stretch of highway in southern Andhra Pradesh state, involved a shadow toll where the private operator levied a toll on the government based on traffic estimates.

IDFC 8212; set up two years ago by a clutch of state-run financial institutions for developing structural mechanisms for attracting large-scale private capital to infrastructure 8212; now expects a significant rise in infrastructure funding.

quot;Our target for the year to March 31, 2001 is for disbursals of about 18-20 billion Rupees and we see projects in all the key sectors 8212; telecom, power, roads, ports and urban infrastructure, mainly water supply, taking off this year onwards,quot; Munjee added.

quot;IDFC disbursed a total of 6.42 billion Rupees in 1999/2000April-March with a majority of the funding being divided among energy and telecom projects.quot;